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Mauritius: African Success Story

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  • Frankel, Jeffrey A.

Abstract

What explains the economic success of Mauritius, a top performer among African countries? How did it develop a manufacturing sector and how has it managed to respond well to new external shocks? This paper draws on the history of the island, the writings of foreign economists, the ideas of locals, and the results of econometric tests. Mauritius has mostly followed good policies, including: creating a well-managed Export Processing Zone, conducting diplomacy regarding trade preferences, spending on education, avoiding currency overvaluation, and facilitating business. The good policies can in turn be traced back to good institutions, including property rights (particularly non-expropriation of sugar plantations), abjuration of an army, and a parliamentary structure with comprehensive participation (in the form of representation for rural districts and ethnic minorities; the “best loser system,†ever-changing coalition governments, and cabinet power-sharing in cabinet). But from where did the good institutions come? They were chosen around the time of independence (1968). Why in Mauritius and not elsewhere? Luck? Some fundamental geographic and historical determinants of trade and rule of law help explain why average income is lower in Africa than elsewhere, and trade and rule of law help explain performance in Africa just as they do worldwide. Despite those two econometric findings, the fundamental determinants are not much help in explaining relative performance within Africa. The fundamental determinants that work worldwide but not within Africa are remoteness, tropics, size and fragmentation. (Access to the sea is the one fundamental geographic determinant of trade and income that is always important.) A case in point is the high level of ethnic diversity in Mauritius, which in many places would make for dysfunctional politics. Here, however, it brings cosmopolitan benefits. The institutions manage to balance the ethnic groups; none is excluded from the system. It is intriguing that the three African countries with the highest governance rankings (Mauritius, Seychelles and Cape Verde) are all islands that had no indigenous population. It helps that everyone came from somewhere else.

Suggested Citation

  • Frankel, Jeffrey A., 2010. "Mauritius: African Success Story," Scholarly Articles 4450110, Harvard Kennedy School of Government.
  • Handle: RePEc:hrv:hksfac:4450110
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    References listed on IDEAS

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    Cited by:

    1. Katsiaryna Svirydzenka & Martin Petri, 2017. "Mauritius: The Drivers of Growth – Can the Past Be Extended?," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(8), pages 54-83, October.
    2. repec:eee:wdevel:v:102:y:2018:i:c:p:243-261 is not listed on IDEAS
    3. Antonio David & Martin Petri, 2013. "Inclusive Growth and the Incidence of Fiscal Policy in Mauritius; Much Progress, But More Could be Done," IMF Working Papers 13/116, International Monetary Fund.
    4. Zenthöfer, A.F., 2011. "The Resource Curse - A Natural Experiment," Discussion Paper 2011-028, Tilburg University, Center for Economic Research.
    5. repec:wbk:wbpubs:28544 is not listed on IDEAS
    6. Xavier Cirera & Francesca Foliano & Michael Gasiorek, 2016. "The impact of preferences on developing countries’ exports to the European Union: bilateral gravity modelling at the product level," Empirical Economics, Springer, vol. 50(1), pages 59-102, February.
    7. Thorvaldur Gylfason & Gylfi Zoega, 2014. "The Dutch Disease in Reverse: Iceland's Natural Experiment," OxCarre Working Papers 138, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    8. Daniel Lederman & Justin T. Lesniak, 2018. "Open and Nimble," World Bank Publications, The World Bank, number 28544, July.

    More about this item

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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